THE Northern Rock gave the regional economy a £60m shot in the arm yesterday, paving the way for up to 3,500 new jobs.

The mortgage lender wants to develop an office complex at Rainton Bridge, Sunderland, as part of its expansion plans.

The £60m development will provide a 380,000sq ft, campus with a gym, restaurant and shops, that will create up to 3,500 jobs.

Northern Rock's chief operating officer, David Baker, said: "This is a fantastic point in time for the Northern Rock and the North-East. We are going to continue investing in the business, in buildings and in people.

"We are not going to take the business elsewhere in the UK or outside the UK."

The company already employs almost 4,000 staff at its head office and a further 850 at its contact centre on Sunderland's Doxford International Business Park.

Employees at three offices in nearby Doxford will be relocated to the new premises. The rest of the places will be filled as part of the company's ongoing recruitment drive.

The types of jobs available on-site will be in customer services, customer retention and processing of mortgage applications and accounts.

The premises will be developed in two phases of 250,000sq ft and 130,000sq ft.

Construction work is expected to start on the site in the first quarter of next year, with a view to the first phase being available for occupation in mid-2007.

Northern Rock's chief executive, Adam Applegarth, said: "A move to Rainton Bridge will offer much greater capacity for our Sunderland operation.

"If we continue to grow at our current pace, we could have 2,000 staff housed at Rainton Bridge in the first phase, which will commence in early 2008. There will be potential capacity for a further 1,500 posts in phase two.

"Together with our continued Gosforth development, this means a potential increase of more than 3,500 Northern Rock jobs in Tyne and Wear, during the coming years."

Northern Rock's announcement could not have come at a better time.

Only last week the final worker clocked off at the LG Philips television factory at Belmont Industrial Estate, in Durham, where 761 jobs were lost.

The bank yesterday reported a 13 per cent rise in half-year profits, to £239.2m.